International opposition to planned CCS subsidies

In June 2010, climate negotiators were in the German city of Bonn, debating a stalled proposal to award UN-administered carbon credits to projects for capturing and burying carbon dioxide.

The move could richly reward the UAE, which plans to build the world’s first nationwide carbon-capture network, but was looking for international funding to help defray its costs. UAE’s technological ambitions ran into a possibly insurmountable foe – Brazil. If Brazil maintains the veto it disclosed last week in an official filing, things are unlikely to change this year, experts said. The proposal had already been put on hold on a number of occasions, including the Copenhagen climate summit last December.

Brazil has worked behind the scenes to delay the proposal for years, analysts say, but declared open war in a submission to the UN Framework Convention on Climate Change (UNFCCC). The plan to steer credits to carbon capture projects through the Clean Development Mechanism (CDM), a funding scheme, amounted to “subsidies to enhance fossil fuel production”, Brazil claimed. Brazil is not isolated as it gets a fair amount of backing from the Alliance of Small Island States.

OPEC and the coal industry, along with international bodies such as the International Energy Agency, have endorsed carbon capture as the most viable means to combat climate change by taking the carbon out of the emissions of fossil fuels that provide most of the world’s energy. Brazil and others, however, say the promise to seal emissions permanently underground is unproven and the money for CCS is better spent on carbon-free energy sources such as solar.

However, Nick Otter, the chief executive of the Global CCS Institute, which has $100 million a year in funding committed by the federal government, said the major challenges of CCS were not insurmountable: “The challenge is to address these barriers to create the conditions for the integration of these technologies at commercial scale and across a variety of applications.”